Market Sizing

This is something easily solved by a google search :). Either way here is a sample solution

First look at the sources of revenue. I can think of approximately 6 sources that the Louvre could have

1. Admission Fees  - ticket sales x price (you can make this complicated by looking at prices for tiers like students etc).

2. Membership and Sponsorships - Many museums have membership programs that offer benefits for an annual fee

3. Government Funding and Grants  as is common for top museums

4. Retail and Commercial Activities - This includes sales from the museum’s gift shops, cafes, and any online sales

5. Events and Rentals - Museums often rent out spaces for events, conferences, or exhibitions at a steep price

6. Donations and Endowments - from rich individuals, corporate grants etc.

Estimate revenue for each of the streams above to get to your final answer

Example of a simple calculation

Let’s say the Louvre has an average admission fee of €15, with 8 million visitors annually, membership revenue of €2 million, government funding of €100 million, retail revenue of €10 million, event-related revenue of €5 million, and donations of €20 million. The estimated yearly revenue would be the sum of these figures (€257M)

Hi there,

You'll learn a lot more from this by trying it out yourself first! Why don't you post your approach here and we can provide commentary?

Hint: Think about attendees + tickets.

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How to approach market sizing

It's very simple: Do the approach the is the easiest for you given the question.

Are they asking you to estimate something where you don't even know where to begin from the top (maybe you have 0 clue as to the market size of the industry, the GDP of that country, etc. etc.)? Then do bottom-up!

Alternatively, does it seem impossible to do a realistic from-the-ground-up estimation of something (perhaps it requires just far too many steps and assumptions)? Then do top-down!

Fundamentally, you need to take the approach that just makes the most sense in that circumstance. Quickly think about the key assumptions / numbers required and whether you 1) Know them or 2) Can reasonably estimate them. If you can, go ahead!

An Example

He's a Q&A for a great market sizing question here asking to estimate # of electric charging stations in a city in 10 years:

https://www.preplounge.com/en/consulting-forum/how-would-you-solve-this-market-sizing-question-from-roland-berger-7631

This one could be answered top-down (as I did) by estimating population of the city, # of drivers/ cars, etc. etc.

OR, it could be answered bottom-up by estimating # of stations you see per block (or # of gas/petrol tanks), % increase this might be over time (or # of EV stations that would be needed per gas tank given EV stations take 10 times as long), and # of blocks you'd estimate the city to have.

Take a look here for additional practice! https://www.preplounge.com/en/management-consulting-cases/brain-teaser/intermediate/taxis-in-manhattan-market-sizing-229

I see you already received a couple of great answers. 

Make sure that you come up with a few suggestions yourself first because this way, we can give you direct feedback (and you get more out of the exercise). 

Adding here another resource that you might find helpful if you're now preparing for interviews:

• Cheatsheet: The Must-Know Consulting Terms for Interviews

Best,
Cristian

Please provide a suggestion - so we can help with the the blind spots. No coach will provide a full answer in here, but if you start by providing your own approach you will get comments on how to improve it (and whether there's something wrong about it).